CFPB Warns of Rising Cash-Back Fees

In a report on "cash back" costs and practices, the CFPB warned that "fees for cash back may serve as a barrier and reduce people's access to cash when they need it," particularly as to consumers in areas with limited access to ATMs and banking services in low-income and rural areas.

The CFPB contrasted three major retail companies—Dollar General, Dollar Tree, and Kroger—that were charging fees (generating approximately $90 million annually), with other retailers offering cash-back services without fees. The CFPB found that these retailer's fees were high relative to the small amounts withdrawn, and limit consumers' ability to access cash without incurring additional costs. The CFPB said that "many merchants pre-determine the withdrawal amount options in a single transaction, commonly between $5 and $50," and as a result, the "fees charged on small, constrained amounts often constitute a high percentage of the cash withdrawal and limit consumers' ability to spread the cost of that fee over larger amounts." Further, the CFPB raised concern that this practice "may induce repeat withdrawals, with consumers incurring a new fee each time."

The report reflects ongoing monitoring and market analysis by the CFPB. The agency recommended continued observation and consideration of policies to ensure equitable access to cash services for all consumers.

In a blog post, CFPB Director Rohit Chopra emphasized that preserving access to free cash withdrawals is a key priority for the CFPB amid increasing digitization.